US Treasury Secretary Janet Yellen has raised concerns about the overproduction of certain goods in China during her second visit to the country. Yellen highlighted the risks posed to jobs and businesses by the oversupply of Chinese goods in industries such as electric vehicles (EVs) and solar panels. This issue has become a major point of contention globally, especially in the lead-up to the US presidential election.
Yellen emphasized the impact of China's overinvestment and excess capacity on global markets, potentially flooding them with cheap products and affecting local industries and employment. While acknowledging China's acknowledgment of the overcapacity problem, Yellen warned that it could harm American firms and workers, as well as those in other countries like India and Mexico.
During her visit, Yellen met with Chinese officials and American executives to discuss the issue of overcapacity and its implications. She hinted at the possibility of trade barriers if China does not address the problem, although no immediate measures are planned.
Yellen's visit coincides with China's focus on boosting manufacturing for export to offset weak domestic demand amid an economic slowdown. Beijing has been investing in industries like EVs and batteries to drive growth, but concerns remain about the impact on global trade.
Analysts believe that tensions over trade are likely to escalate, with potential tariff increases on Chinese imports and realignment of existing tariffs. Yellen also plans to discuss bilateral cooperation on countering illicit finance and addressing global issues such as climate change and financial stability with her Chinese counterparts.
However, experts suggest that Beijing is unlikely to change its economic policies, indicating ongoing challenges in US-China relations. The outcome of Yellen's meetings may be limited, with both countries maintaining firm stances on key economic issues.
